Each year the expense of college rises, resulting in the need for students to take out loans. Many students expect to immediately get a job after graduation, however, in more recent years the chances for college graduates to get a well paying job isn’t nearly as high as it used to be. Because students can no longer depend on getting a job fresh out of college, it has become harder to repay the loans. Without a steady income, these individuals have gone into debt and frequently default loans. If nothing is done to stop colleges and universities from increasing the cost of attending their school, the amount of time it takes for students to pay off their loans will become longer and longer.
Imagine finally graduating college, you are happy and ready to make a difference in the world. Only to find out that before you even start you are already swamped with debt. This is the problem hundreds of thousands of students face every year. Why are they in debt, you ask? They are in debt because of the rising price of college tuition and the student loans they took out to be able to afford attending in the first place.
The total student loan debt is $1.2 trillion with $1 trillion being from federal student loans (Denhart). This debt accounts for six percent of our nation’s $16.7 trillion debt (Denhart). Since student loan debt is such a big part of the national debt, if the student defaults on their loan then the United States tax payer has to carry the burden of the loan (Denhart). Students who are graduating with debt do have a couple of different options that they can choose from. There is a six month grace period after graduation to allow the student time to find a job and programs to try to help eliminate debt.
There are many different types of student loans some of which do not have to be paid until the student graduates college and some that do need to be paid during the student’s college career. Although college students are aware that they are borrowing money for college to eventually pay it back, the student loan debt takes over every other priority in the college student’s life. College students become discouraged and demotivated to go on to the next journey in their lives after they graduate college once they see the horrible student loan debt they are in. A 2002 study found that 17 percent of student loan borrowers reported their loans had a significant impact on their career plans (Baum). In addition, 52 percent of people said they either strongly or somewhat agreed with the statement that their “need to pay student loan debt is hampering my ability to further my career” (Lanza).
For those students who do decide to attend college, they are forced to take out loans provided by either the government or their university, which has a large interest rates. In a recent study done by Project on Student Debt, it was reported that in the graduating class of 2015 from public and for nonprofit schools, about 68% had student debt, averaging around $30,100. This is a 4% increase from the 2014 class. As of 2016, the debt in America just from student loans is almost at $1.3 trillion, the second highest debt, first being the housing debt. These two debts will continue to increase, as college graduates are pushing off buying their first home, mostly because they cannot afford it.
An estimated 20 million Americans attend college each year, and 60% of those students borrow annually to pay for it (qtd. in asa.org, “Student Loan Debt Statistics”). Moreover, citizens continuing to pay off debt after schooling brings the overall number of student-loan-borrowers to about 40 million- with a collective 1 trillion dollars in debt (McCarthy, “10 Fun Facts About the Student Debt Crisis); a fourth of these borrowers owe over $28,000, a tenth owe over $54,000, 3.1% owe more than $100,000, “and 0.45 percent of borrowers, or 167,000 people, owe more than $200,000” (Haughwout, “Grading Student Loans”). While some view this predicament as the result of laziness or carelessness, the bulk of this substantial group are not at fault. Low wage jobs, underemployment, and high unemployment rates have forced individuals striving for 'the American dream', upward class mobility, and a greater education to choose indebtedness, often at prices they can not and will not be able to afford.
Pros and Cons of Attending College Tyree Thomas Zane State College In 2013, 19.9 million students were enrolled in colleges and universities (college, 2014). Also in 2013, the unemployment rate for college graduates over 25 was 3.6 percent (college, 2014). Those are both great examples of a pro and a con of attending college. Although, attending college has many pros and cons. Most college graduates make more money, but student loan debt is crippling them.
Reports show that college tuition has rose 439 percent between 1982 and 2007 (Student Loans). However, with the rise in tuition, comes the rise in student loans. Government loans are offered to students who otherwise would not be able to go to college, with the agreement that students will pay back the loans with interest. Therefore, the government spends $34- $45 billion on student loans (Belkin). However, due to the 18.5% unemployment rate in 2009, the US Department of Education concluded that 46.3% of loans go into default (Student Loans).
Studies show that student aid debt has been growing steadily from 1996 to 2009. A 2010 survey, forty five percent American families hold student loan debt. College tuition and fees are growing at a constant rate. The cost of college requires students to take out loans to pay fees. However, what they have to pay back is often more than the degree is worth in terms of income.
Cohen explains “Tuition has risen almost 1,200 percent in the last 35 years, and the sticker price for many four-year private colleges and out-of-state public universities exceeds $250,000.” Moreover, he goes on to say that even at public universities, it is about $80,000 for four years for tuition and other college related expenses. Later in his article, Cohen explains how this leaves middle-class families in a very uncomfortable situation. The parents or other money-making entities in the household want their student to go to college and earn a degree, but now there can be an element of stress in figuring out how the fees will be paid for. Furth... ... middle of paper ... ...es have skyrocketed in recent years, putting the pressure on the student to either take out loans and risk going into debt or to not attend college altogether. If the EFC formula was revised or drastically cut, then maybe the average middle class family could cope better with the tuition bills.